The future of online vs. residential education

October 8, 2012

In this correspondence (posted with permission), Ray Kurzweil and MIT president L. Rafael Reif discuss the future of online education and its impacts on residential education. Also see the three related posts today (below). — Ed.

Hi Rafael,

I enjoyed your insightful piece in today’s WSJ on the emergence and future of online education. It eloquently makes the point that online teaching is here to stay. But I find it hard to accept the comfortable conclusion that “online education may improve the financial model of residential education. If a university’s courses can be offered online for small fees to people around the world, we might arrive at a sweet spot where high numbers of online learners are getting extremely good value for their fees and the university that creates the content is using those fees to serve the mission of the university as a whole — part of which is to make education, on and off campus, affordable.”

This reminds me of the positions of leaders of the print book industry just a few years ago. It seemed inconceivable at that time that the print book business with its half-millennium history would become worthless in just a few years time, so the predictions by industry leaders were that the venerable print book business would coexist happily with the augmentation of e-books that would allow people to travel easily with their favorite book.

The situation now, just a few years later, is the following. In Microsoft’s recent investment in the e-book division of Barnes & Noble, that division was valued at $1.7 billion. After the deal, the parent organization is worth about $800 million, so the brick and mortar part of Barnes & Noble actually has a negative value. Borders also achieved a negative value and no longer exists. It is my view that a similarly disruptive revolution is going to occur in higher education.

This revolution will be accelerated by the financial crisis that higher education now presents. That crisis is not simply that universities are finding their finances strained but rather is evidenced by the extraordinary escalation of the price of their service to its customers.

The rise in the cost of higher education has been worse than any other sector in the economy including health care. The reasons for this are not clear but a contributing factor has been the preoccupation with brick and mortar expansion.

There were criticisms of e-books a few years ago such as the lack of complete content, the limitations of the readers, and so on. These limitations have now been largely eliminated and a stunningly quick revolution has shaken that industry to its core. Other communication, media and knowledge industries have had similar experiences.

I think the first-tier universities, such as MIT, Stanford and the Ivy League schools, will have a bit more time to adjust, given their prestige and the buffer of their endowments, but this transformation will ultimately have profound consequences for all participants. After all, Barnes & Noble and Borders were premium brands also.

MIT does have a powerful — and well deserved — brand and that will serve it well in the new e-learning field. It is very positive that MIT is playing a leadership role in this arena.

And as I said before, it was very fitting that you were selected as the new President given your personal leadership in MIT playing this role. However, I do think that when the change gets going, it will happen faster and more profoundly than people expect. It is easy to get lulled by hundreds of years of tradition and stability.

Best, Ray

Hi Ray,

Thank you for your excellent and thoughtful note. I need to think about it some more, and I truly appreciate your candor and insight.

comments 20

Ray
Sorry I do not know you .
1.- Please do not compare ebook projects with edx. ( be careful I SAY EDX only )
2.- ONLINE is here for 20 years with credits, degrees at a very bad quality, at a very high price. Even an eschool made $ 1 billion profit in one year .
3.- So now how come you say much better online by MIT Harvard with all the research capabilitiesi learning labs and research on learning , non proft MITx Harvardx will not replace traditional universitity in USA.
Already bad online replaced 39 % of the traditional HE in the USA.
See annual report of Babson College + Sloan . Now 7 million students are taking bad online courses and degrees and nobody says anything .including you RAY. I have fought those bad online for 20 years .
Now I expect degrees from edx .
4.- It seems you are not aware of online costing.
An online course developed and provided by EDX will cost less than $ 1 .
Therefore they need to charge only $ 10 to $ 100 depending upon enrollment . If they reach as they claim 1 billion students then profit is
$ 10 billion to $ 100 billion . I could build the world again .with that money
So they will not be using somebody else’s money whatsoever .

It’s really ‘game-over’ for the current mass-market direct instructor-led model higher ed. We know it, the folks in higher ed know it…..we’re just watching the clock run down. While it will take another 5 years for the cost/technology wave to really break on higher ed, it will quickly snuff out the smaller schools. Some will try to adapt by offering on-site classes, off-hour classes, and more alternative course structures (accelerated programs like RN-to-MSN programs), and this will be good…..but transitory…..without subsidies or endowments, it will buy these adapters another 5-10 years…..but all the rest will get flushed. The bigger names will have time to re-calibrate, but they have tremendous inertia holding them back……poor internal execution, entitlement mentality, etc. The keystone issues for these larger institutions will be: (a) intellectual property monetization, and (b) comparative dollar denomination of prestige. If they can do the first one in time, they will have bought themselves a life line….and lost their soul a bit as they are now running like a business (a good thing). And if they cannot stop the second one (due to standardization of curriculum/skills across the industry, performance reporting [placement rates, 5-yr graduation rates, etc.], and the chipping away at the difference between a diploma and credentialing) then the tsunami will really roll through. I know some in academia believe their unique place and facilities are not replaceable. They need to understand that they’re in a competitive war zone and, as Patton said, “Fixed fortifications are monuments to man’s stupidity.” Although those facilities are a comfortable vantage point to watch one industry model die and another one grow….at least until they’re auctioned off to fulfill PILOT agreements.

I learn from reading, watching webinars, and interactive online programs.
I took a Udacity course on encryption. I am certified in several programs from reading and attending webinars. My company provides online courses to stay current. I think for Engineers, this is a good way to learn.
My 12 year old daughter has been online for years and interacts with some long distance friends only online. I can see that online education is growing rapidly and will replace some of the brick university learning. The Phoenix U. model will become cheaper. There is no going back.

This On Line Education time has come to stay. Reason modern education is expensive and is not related to the current job requirements. OnLine can do prepare noting these defects. Some subjects On Line is good and others like Medicine,Pharmacy, Biology and Eng need practical work. Some animation and or models might just do the trick. While vast distances and national boundaries can be covered by Internet, we should have a sound standardized method to evaluate so the employers would know the caliber of students. This method removes pollution from cars, saves on petrol and maintenance, frees study time,increases part time job opportunities. The Market place got to decide how this approach will work, new ides have to be tested and refined and that is what we excelled in product development, and why not apply the same principles?

When your readers are in the position of interviewing and hiring young people that have “benefitted” from various systems of education, then, they will be able to judge how these systems have prepared the young. Most systems have their benefit, however, if the student isn’t interested the result is less than helpful to the student and to the employer. I have my own system that follows a quote that I once read, viz., “Be your own teacher and be your own student.” I guess, that at some point, I will have to give myself my own diploma.

I get the feeling that most of the comments are being made by a generational cohort that came of age in brick and mortar classrooms and work in industries where their bosses also learned in brick and mortar classrooms. If the bosses consider online learning inferior, they’re probably dealing with younger people who have so far had a very different life experience/world view. And those older people are threatened by the newer paradigm and take comfort in the familiar. It’s likely that their own brick and mortar institutions are also under assault from online competition.

I agree with the idea that educational institutions are in the business of preserving the status quo. There is still a lot of value in gathering brilliant minds in a localized space and letting them bounce ideas off one another. But the internet is a not-unreasonable substitute for this and can draw alot more brilliant minds from much greater distances. And communicating via the internet will be much more efficient once we move away from keyboards and mice when we’re trying to exchange ideas.

Don’t discount the online learning experience simply because it’s not how you learned and the young people looking to get hired don’t have the years of experience in dealing with the world that we’ve accumulated. Likewise, don’t look at the current state of online education and think it’s not going to get any better than this.

Singularity University CEO Rob Nail is “looking to the internet to expand the university’s reach. After experimenting with putting some class videos online – ‘nobody’s going to watch an hour lecture,’ Nail says – the university decided to get more ambitious. The goal now is to build an interactive site that that can take some elements of the Singularity U curriculum to a wider audience, possibly in partnership with Udacity or some other online education venture. Nail also plans another site that would publish writings from faculty, pointers to items of interest to the Singularity University diaspora, relevant video and audio – ‘a forum for all the cool things that we see in the world,’ as Nail puts it.”
— http://www.wired.com/business/2012/08/singularity-university-upgrade/

Education in general has been in trouble for awhile now.The comic strip Doonesbury did a wonderful job lampooning the core issues of the problem.. Everybody is interested in the pay check that a sheep skin can give you. I’m shocked on a regular basis, at how many higher education graduates, don’t have the slightest understanding of their areas of expertise. The same issues are painfully apparent in preliminary public education. So many ” High School graduates” have almost no functional knowledge. I fear that this trend will increase in online education. It’s a fundamental lack of understanding the act of learning. In my eyes it is well illustrated in the roundedness of an individual. If you can figure out quadratic equations, but can’t figure out how to plug in stereo equipment or the like, it implies that you don’t understand problem solving. My father is a classic example. He regularly would score in the 140,s on IQ tests, but would have trouble on some of the simplest of activities, such as trouble shooting a video link. He gave up on computers because it was impossible for him to understand. I asked him how he did so well on IQ tests and he said that there was a trick to it. Most people use this type of thinking. They do the minimal amount of in depth understanding. In college I took a theory of education course and was at odds with the teacher at every bend. It was an elective and he didn’t give tests, we were graded in a final paper. I ripped into his premise, and he gave me a failing grade. I spoke to him after class, very politely and said it was undeserved, so he said that he would reconsider if I rewrote the paper with my ideas. The general premise that I proposed, was that we are always learning. Any intellectual indevour demands a constant review and synthesis. The best way to learn, is to teach someone else what you know. It forces you to simplify and coordinate what you know. I proposed a system of community education. That there were universities or campuses that everyone had to go to , to learn from others and to teach others what you know. This can be achieve with the Internet. The big problem with on line education and education in general, is that if you don’t understand a fundamental aspect, everything you know can become flawed. If you are constantly interacting with people who do know, you can find those short comings and strengthen your weaknesses. By trying to explain things to others, you find your weaknesses and fix them yourself. By this peer review, you can keep abreast and continue to learn. Even subjects that you thought you knew, become far more integrated by having a community to act as a sounding board. I hate to say this, but as AI becomes a reality, people will become less likely to want to truly understand things. It will become the ultimate ” cliff notes” or ” google search education. Very superficial . Totally lacking in making the fundamental connections.

I am an employer in continuing medical education. I too would like to see an increase in the depth of knowledge, attention span, problem solving skills, and I would like to see a conversation about how to have the discipline necessary for residential learning, especially for young adult learners.

“The rise in the cost of higher education has been worse than any other sector in the economy including health care. The reasons for this are not clear ….”

You can say that again. I don’t want to don the tinfoil cap… but one could make the argument that there is a concerted effort to price higher education out of the range of the dwindling middle class. And even if there is no “concerted effort”… the result is the same.

I’m all for affordable E-learning but IMO its just not as good as being in a real classroom environment.

The MAIN reason traditional education exists is because asinine govt officials make money available through obese, specious student loan programs.

Despite years of formal education, university provosts and presidents aren’t stupid: they see free govt money and grab it to build vast physical empires. Of course, it lets them RAISE PRICES, too. (After all, they are non-profit “executives.”)

Meanwhile, to hell with the graduates w/$150K in debt – they’re now banking and govt collection customers for decades to come. Woo-hoo, a virtuous cycle.

BTW, don’t forget the traditional symbol of brick and ivy accomplishment – the mortar board. That it resembles a bricklayer’s hawk is NO coincidence!

The govt must STOP propping up these institutions with vulgar student loans and gratuitous tax treatments.

Ray Kurzweil has done a great service by engaging in this debate. The crisis in the economics of higher education has been building for years. There is indeed a higher education bubble that is about to collapse. Of course, Government lending rules and now a take-over, combined with rampant credentialism has accelerate the inflation of this bubble, with costs increasing at greater than four times other costs in the economy ( http://inflationdata.com/Inflation/Inflation_Articles/Education_Inflation.asp ) since 1985.

Ray is right! Only those educational institutions (and importantly HR departments) that quickly adapt to the new technological and financial realities will survive. Expect consolidation into a hand full of educational and research niches. Fear a new wave of credentialism, especially in Government and the professions.

Distance learning has been around for a long time. Mail order courses used to be very popular and quite a fad decades ago. For the same reasons that mail order courses failed, distance learning will also fail and much quicker than most would predict. What distance learning demonstrates is that there is a lack of teachers and classrooms around the world. If distance learners in far away places like India had the opportunity to attend an accredited course at a brick and mortar educational institution, would they settle for online learning, I don’t think so. Would an employer rather hire someone who attended an online course or a classroom course? Based on my experience, employers consider online courses inferior.
The larger question is why are we charging students to attend colleges and universities when other highly developed and some not so highly developed countries are not? We have decided as a country to be anti-intellectual otherwise we would be paying students to attend higher education.
If distance learning has any future at all, it will be to augment classroom learning by bringing distant educational resources into the classroom.
Consider other potential distance experiences such as sex, travel, cooking, music, nature, and so on. None of these experiences are enhanced by experiencing them through a computer monitor and a keyboard. Why should education be any different. Any readier of education literature will know that the ultimate educational experience happens one on one with a mentor/instructor. Any other form diminishes that experience. A class with a hundred thousand students is at the opposite end of the spectrum even if were taught in a stadium. An online version would be so far removed from the optimum experience that it shouldn’t be considered teaching at all. Even this conversation would be considerably more valuable if it took place in real-time and in person. Online sex is mostly masturbation, online learning is not much different.

@Max: I think this type of learning won’t be such a fad. Although I agree with your point that the best learning will still be at high quality brick and mortar institutions, virtual experiences will grow rapidly. As cell phones shrink to the size of red blood cells, we will be able to experience all the examples you cite, in very realistic ways, engaging all the senses, as if they were actual physical experiences. Strong AI could become the most sensitive teacher/ mentor imaginable. They in theory could have all the time in the world to engage you one on one, no matter how many thousands or millions of students there are. It’s still a few years of, but the trend to use the Internet as a tool for self education, whether in on line courses, or chats like these, will only continue to evolve.